Having spent a fruitless hour looking in the area 200 yards to the east of the sheep pen as described by Bezant Lowe, I gave up and walked away disconsolately. Then lo and behold about 150 yards away I suddenly walked over exactly what I had been looking for all that time. I'm sure I only noticed it because I was grumpily walking along staring at my feet!
It turns out to be about 150 yards SE of the sheep pen right at the NE side of the Afon Ddu. It is 3 yards to the south of a granite pillar with the number 5 inscribed on it, which I have since discovered is a waymarker for the Llanfairfechan Upland Walk marked out by Conwy council.
"Some Arrow Stones and Other Incised Stones in North Carnarvonshire and North Denbighshire" by W. Bezant Lowe in Archaeologia Cambrensis 1924 pp. 340 - 362 gives the following description:
"This stone is situated on Nant-y-Cytiau, about 200 yards east of the sheep pens on the way to the Pass of the Two Stones, and close to the Afon Ddu; the sheep pens are about 300 yards east of the wall that runs across the moor to the Afon Ddu. The stone is not very fine grained and is partially covered with turf. All the marks are very distinct, one being ¼ in.wide and 5/16 in. deep. The marks are in groups and vary in length from 4 in. to 10 in. In the centre of the stone is one mark which cuts two others at right angles. The length of the stone (which runs from east to west) is about 2 ft., being 2 ft. broad at the eastern end and 16 in. at the western. There are at least 29 marks."
There is a funny pattern of walls on the OS map at SH 7093 7258 which on the 1891 OS map is marked as a sheep fold and which is just over 300 yards east of a wall that runs north to Afon Ddu. This is less than 1 Km from the standing stones at Bwlch y Ddeufaen and so it seems to fit in with Bezant Lowe's sheep pens. The arrow stone should therefore be another 200 yards further east at ca. SH 7111 7258.
The Gwynedd Archaeological Trust have sent me the information that the Regional Historic Environment Record has an arrow stone recorded at SH 7101 7249 and that there is also reference to the site in the 1956 RCAHMW Inventory of Ancient Monuments in Caernarfonshire Vol 1:East p.127 but that the RCAHMW officers state that the stone could not be located. Perhaps they were looking in the wrong place or perhaps the stone is now totally covered with turf? Who knows? Either way, I hope I can find the time one day to have a good search in the area but would be delighted to hear from anyone who gets there before me!